Branding (as part of Customer Management)

 . Brand = a signal (negative or positive) that influences the consumers position to buy a product. Brands are a way of signalling quality and of communicating identity.

· · Branding is about how a product or service can develop a good relationship with a customer so that a premium price can be charged. It is about how the customer feels when associated with the product/service; it is about perceptions that have not been formed by accident. They have been formed by a relationship which has survived good times and bad, via consistent yet differentiated positioning, innovative production and promotion, a high level of service, a commitment to remaining ahead of customer needs, delivering on promises, etc.

· · Branding is about creating a positive interaction with the customer and not being an annoyance.

· · As Richard Branson stated, a brand needs to appeal to an attitude of mind, more than a particular demographic.

On the other hand,

"...too many companies want their brand to reflect some idealistic, perfected image of themselves. As a consequence, the brands acquire no texture, no character and no public trust..."

Richard Branson, 2008

· · The power of a brand is demonstrated when Virgin moves into a new product and/or market, such as Virgin into the mobile phone market. It sends shock waves through the incumbents.

· · For example, Phil Knights did not sell a lot of Nike Air because customers wanted to jump higher, but because, as basketballers, they wanted to be like Michael Jordan.

· · Traditionally businesses focus on the core. Of the 20 top brands in the world, 19 are associated with one product type, eg Coca-Cola specializes in soft drinks, Microsoft produces computer software, Nike makes sports shoes and clothes. The only exception is Virgin where Richard Branson uses the Virgin brand as the glue that holds his diverse business empire together. The success of this brand is derived from its focus on customer service; this focus is supported by values including innovation, honesty, caring, value-for-money and fun. Virgin is keen to make its interaction with its customer a fun experience, eg uses irreverent humour.

In fact, everything is done to protect the Virgin brand's reputation, ie

"...our aim is to establish Virgin as the most respected brand in the world......by offering customers excellent value for money in so many areas of their lives, we aim to make them happier......Virgin's success is primarily down to the consistent way it's delivered on its brand proposition......because the central proposition of the Virgin brand is about customer experience, Virgin has..... innovative products or services to satisfy changing customer demand..."

Richard Branson, 2008

In fact, Branson (2008) has described Virgin as "branded venture capitalism"

· Need to understand the difference between luxury and consumer brands. The central message of the luxury industry is its exclusivity, ie people are excluded, usually owing to price and/or availability. This is the complete opposite to customer brands where one is trying to encourage the mass market to buy. Thus luxury goods are able to charge a higher price. Despite this, luxury consumers are not dissimilar to ordinary consumers in their stages of consumption, ie evolving from necessity to discretionary spending then to conspicuous brand consumption.

· Luxury brands - there are 5 stages of market evolution

i) basic needs like shelter, sustenance, social belonging, etc

ii) some surplus earnings allow purchases of amenities like cars, white goods (refrigerators, washing machines, stoves, etc)

iii) surplus earnings are large enough to be able to buy and boast about prominent luxury brands. Price can create some exclusivity

iv) "nouveau riche" stage - able to buy goods and services for not what they are but what they represent, ie success

v) when statements of wealth cease to matter, ie because the consumer is so wealthy and/or their environment attaches value to elements other than brand display

"...The ability to surpass envy is a true luxury..."

Andrew Cornwell, 2013

At this stage, hidden brands become important as they demonstrate an inherent exclusivity that relies on knowledge rather than wealth. Also the narrative of the brand becomes important.

"...Luxury is a business whose products rely on craftsmanship, history, exclusivity and service. When the business is run well, the customer enjoys a luxurious experience that transcends price and rarity..the experience is an intangible asset..."

Andrew Cornwell, 2013

· Fighter brands are created cynically to combat a competitor that is threatening your market share. This is different from traditional brands that were designed with target consumers in mind. Many fighter brands fail for the following reasons:

i) cannibalisation - when the fighter brand is aimed at a low-priced rival but ends up reducing sales from more profitable premium brands, eg Kodak's funtime film aimed at Fuji's cheaper products but ended up doing more damage to Kodak's own premium gold plus line

ii) failure to attack - concern about cannibalising premium brands resulting in developing a timid strategy that has minimal impact on the competition

iii) internal orientation - become so inwardly focused on developing fighter brands that you forget about customers, eg United Airlines launched TED to combat low-priced carriers but it was still more expensive

iv) missing profitability ? when an organisation creates a brand designed to compete with low-priced rivals but has no capabilities to handle the resultant situation

v) resource drain - timing for launching a fighter brand is wrong and resources are wasted

Branding as part of change management

"...good branding, it's an organisational change exercise...... it signals so much more than an updated logo. It does signify an organisations change and where they're going..." and immediately identifies what the organisation is about
Cameron Kerr as quoted by Michael Bleby, (2015)
Logos are critical because they lodged themselves in the consumer's mind, ie
"...the mind works better looking at pictures than words, so if you can create a picture, or an image through the design of a logo that resonates or associates a certain company, you'll recognise that company straight away..."
John Borghetti (Virgin Australia) as quoted by Michael Bleby, (2015)

"...it is not just a piece of graphic. It needs to communicate everything about the business and it needs to be captured in one simple device. It needs to work on the size of a football field and it needs to live on an app..."

Hans Hulsboschas quoted by Michael Bleby, (2015)

Need to be aware of overused buzzwords include "crafted, artisan, immersive, curated, innovative, disruptive, bespoke, heritage and authentic"

Some examples of re-branding to create a new image and as part of change, especially after bad publicity (AFRBoss 2015b):

- following corruption allegations, Leighton Holdings changed its name to CIMIC (construction, infrastructure, mining and concessions)
- under pressure from investors over alleged human rights abuses in detention centres and founding families' withdrawal of the right to use the Transfield name, Transfield changed its name to Broadspectrum
- Onesteel became Arrium
- QR National is now Aurizon
- ICI became Orica

 

 

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